Issue No. 62, covering the period 1- 30 June 2010 Kathmandu, 7 July 2010 I. HIGHLIGHTS • Prime Minister resigns, paving way for formation of national unity government • Flash floods inundate 230 Village Development Committees (VDC) in Jhapa and Sunsari districts in the Eastern Region • 2010 Disaster Preparedness Activities completed in more than 40 districts • VDC secretaries continue to face threats from armed groups and have submitted group resignations across the country. II. CONTEXT Political Developments More than a month after the three major parties adopted the Three Point Agreement on 28 May to extend the CA tenure by a year, Prime Minister (PM) Madhav Kumar Nepal has resigned, stating it would not be appropriate to keep the country in indecision and uncertainty for a long time. Addressing the nation in a televised address on 30 June the PM said he decided to resign to help end the protracted political deadlock and to allow the peace process to move forward despite having a clear majority in parliament. The PM handed his resignation letter to President Dr. Ram Baran Yadav after which the latter called the political parties to form a national consensus government by 7 July following the approval of the PM resignation. All three major parties, the Unified Communist Party of Nepal -Maoist (UCPN-M), Nepali Congress (NC), and Communist Party of Nepal-Unified Marxist-Leninist (CPN-UML), have staked a claim to the leadership of a new government but intra-party differences have made the political scenario unclear. Competition in the NC between NC parliamentary party leader Ram Chandra Poudel and former prime minister and senior NC leader Sher Bahadur Deuba have had led to divisions within the party, with Poudel reportedly favoured by party insiders while Deuba enjoys greater support from external actors. In the CPN-UML, Party Chairman Jhala Nath Khanal and senior leader K.P. Oli reportedly remain keen aspirants for the top position. The major parties however, have not reached agreement on the next leadership or modalities for the integration and rehabilitation (I/R) of Maoist army personnel, the major sticking points in the continuing political deadlock. With few points of convergence emerging on these issues, it seems increasingly likely that the next government will be majority-led, rather than one of national consensus. As the deadlock persists, small parties of the ruling coalition stressed the need for implementation of the 28 May three-point agreement, stating that I/R and the resignation of the PM should be implemented at the same time. Meanwhile, on 12 June the Nepal Workers and Peasants Party (NWPP) withdrew its support from the ruling coalition, alleging that the government had failed to propel the constitution and peace processes. The Constituent Assembly (CA) has failed to make any progress since its tenure was extended by a month on 28 May. A meeting of the three major political parties, called by CA Chairman Subas Nembang on 27 June, discussed the formation of a high-level State Restructuring Commission (SRC), a new time-line for the CA calendar and contentious issues in the reports of eight thematic committees which are yet to be discussed in the CA Plenary. The Chairman urged leaders to constitute the SRC in order to begin work on the numbers, names and boundaries of the federal units. The UCPN-M made clear that it would not allow the government to present policies and programmes for the new budget in the Legislature-Parliament (LP) unless the Three Point Agreement was implemented. President Dr Yadav nevertheless sent a letter to the LP on 28 June calling for this session to begin on 5 July, thus rendering the smooth passage of the budget session uncertain. The work of the Special and Technical Committees (TC) has been stalled by the ongoing political deadlock. Donors, along with the UN, have been meeting with TC members to discuss technical preparations for possible support for the discharge, rehabilitation and integration of the 19,602 qualified Maoist army (MaoA) personnel. The UN and the donor community will give a joint presentation to the TC and subsequently to the leaders of the major political parties, focusing on the processes and principles of I/R, as well as on lessons learned from the discharge and rehabilitation of the 4,008 disqualified MaoA personnel. Nepal Monthly Situation Update, Issue No. 62, 7 July 2010 1 The Nepal Army (NA) has reportedly submitted a proposal that would place it directly under the President through the Defense Council (comprising heads of all four security agencies), bypassing the Ministry of Defense (MOD) entirely. This proposal comes in response to the MoD’s own recommendations for democratizing the NA that were reportedly sent to the NA on 14 June. Protests On 8 June, Nepal Free Hotel Labours Union (NFHLU) closed hotels in Biratnagar, Morang District, demanding a 10 percent service tax according to the agreement made with hotel entrepreneurs. Hotel entrepreneurs agreed to implement the tax on 16 June and the NFHLU called off their strike on 16 June. Janatantrik Terai Mukti Morcha –Rajan Mukti (JTMM-RM) called for a bandh Dhanusha on 17 June protesting the killing of their cadre by police in Janakpur on 13 June. No vehicular movement observed and markets were closed. The National struggle committee of the temporary teachers under the relief quota reportedly called for the closure of community schools since 27 June demanding the remuneration equal to other teachers. The minimal impact of strikes observed in the Eastern Region and central Terai districts. Cadres of Samyukta Janatantrik Terai Mukti Morcha fatally shot the secretary of Babargunj VDC of Sarlahi district, a government employee, on 16 June. VDC and DDC offices in ER and CT remained closed down on 17 June, protesting the incident. A fundamentalist Hindu group, Bhisma Ekta Parisad, announced a general strike in Mid Western Region demanding the declaration of a Hindu state and the implementation of the Three Point Agreement. No vehicular movements were reported and educational institutions and markets remained closed during the strike. One vehicle was reportedly set on fire in Banke district on 22 June, allegedly for defying the bandh. Operational Space During the month of June there have been numerous threats targeting local government officials across the country. Village Development Committee (VDC) Secretaries have been resigning en masse due to threats from Samyukta Jatiya Mukti Morcha (SJMM) as well as other groups and political parties. Of particular concern are the letters posted by SJMM to VDC Secretaries throughout the country demanding their immediate resignation and threatening action against those who do not comply. Since January 2010, 1,239 VDC Secretaries in 23 districts have received threats verbally or through letters. During this same period, 514 VDC Secretaries have reportedly resigned across 11 Districts citing insecurity as their main concern. Of these, 339 Secretaries in eight districts have resigned due to threats from SJMM in June 2010. Very few operational space incidents have been reported by BOGs Signatories. On 1 July, the three main political parties urged VDC secretaries to return to work stating that the development work is being affected following their resignations at the end of the fiscal year. However, the VDC secretaries have stated that they will return to work only after holding dialogue with the SJMM. The Limbuwan State Force (LSF) torched the office building of Satashidham VDC of Jhapa district on 7 June. According to the VDC secretary, the fire destroyed two rooms of the building. The LSF took the responsibility for the incident informing the media persons, media reported. Police also found some pamphlets of LSF in the incident area. On 22 June UCPN-M cadres smeared black soot on the face Parsa District Development Office Engineer, accusing him of corruption. Civil servants halted the work of DDC on 23 June in protest and demanded improved security. Meetings were held in Surkhet and Kailali districts on 8 and 9 June regarding the Basic Operating Guidelines (BOGs). Participants discussed the current operating environment, challenges during the 1-6 May UCPN-M bandh, and ways of moving forward with the new dissemination of the BOGs. In Doti, the close coordination of I/NGOs working in the district has enabled them to respond to external demands (such as for donations) in a unified manner. Meanwhile, on 3 July, VDC secretaries decided to go back to work following the request of DAO, DDC and political parties with assurance of political dialogue with SJMM from the political parties. Safety and Security A vehicle was destroyed when a fire engulfed it followed by two explosions in Basundhara, Kathmandu on 8 June. Nepal Army bomb disposal team discovered a socket bomb in the area which was successfully diffused. Seven people were injured in the incident. An unknown group ‘ Swatantra Nepal Dal’ (Free Nepal Party) claimed responsibility for the explosion by issuing a statement. Police detained three persons including the driver of the car and the shopkeeper where explosive items had been stored for 21 days. Nepal Monthly Situation Update, Issue No. 62, 7 July 2010 2 Police arrested several members of Kirant Janabadi Workers' Party (KJWP) over the month of June. Five central level leaders of Nabin Kiranti-led KJWP-NK were arrested from Dharan and Itahari of Sunsari district on 4 and 5 June. Similarly, General Secretary, central member and Limbuwan division chief and alternative central members on alleged charge of attacking a Police Post in Nunthala VDC of Khotang district earlier on 4 May were arrested by police on 7 June. Five people were reportedly killed in Dhanusha, Janakpur the week of 8 to 14 June. Three out of five killings have been claimed by the armed group of Janatantrik Tarai Mukti Morcha (JTMM- Rajan faction) and police investigations into the killings are ongoing.